Accountancy suffers from 'restrictive practices' in Europe

FORMER EU vice president Lord Brittan has called for a “ruthless” drive to create a single European market in accountancy and other professions.

Prime Minister David Cameron’s trade adviser said the EU adopted a directive on the mutual recognition of professional qualifications in 2005 but restrictive rules “remain rife”, citing entry barriers ranging from fixed tariffs, complex shareholding requirements, onerous capital requirements and restrictions on the legal form a company should take.

Brittan’s appeal, in a speech to Business for Europe, followed the disclosure of UK government thinking in a summary of a letter to the Commons EU Scrutiny Committee from Employment Minister Edward Davey warning any “forced” break-up of the Big Four to ease concentration at the top of the audit market risked “unintended consequences” and voiced support for a single audit passport provided it was only required for firms operating in two or more member states and not to all practitioners.

Brittan’s approach was directed at the whole of the EU business services sector which he claimed is 40% less efficient that in the US.

He urged: “We need a ruthless focus on making the single market work and tackling restrictive practices in particular sectors.”

He added: “Many of the restrictive practices which remain apply particularly to important economic sectors, such as construction or accountancy.”

The Tory grandee on leave as vice chairman of UBS Investment Bank and Trade until March [2011] and Industry Secretary in Mrs Thatcher’s government, said: “We should ask whether Europe should continue to regulate around 4,600 professions across the single market or whether more could be done to remove barriers to the cross-border provision of professional and business services to create a more integrated single market.”